Kipawa Heavy Rare Earths Deposit Is Matamec in your stock portfolio? October 2010
Disclaimer The information contained herein has been prepared to assist interested parties in making their own assessment of Matamec Explorations Inc. (the Company ) and does not purport to contain all of the information that an interested party may desire. In all cases, interested parties should conduct their own investigation and analysis of the Company, its assets, financial condition and prospects, and of the data set forth in this presentation. The Company does not assume any responsibility for independent verification of any of the information set forth herein, including any financial forecasts or statements about the prospects of the Company contained herein. The Company does not make any representation or warranty as to the accuracy or completeness of this presentation or the information contained in, or for any omissions from, this presentation or any other written or oral communications transmitted to the recipient in the course of its assessment of the Company. By the receipt of this presentation, the recipient acknowledges that only those particular representations and warranties, if any, which may be made to a party in a definitive written agreement regarding a transaction involving the Company if, as and when executed, and subject to such limitations and restrictions as may be specified therein, will have any legal effect. Corporate Presentation 2
Management and Board of Directors PRESIDENT & CEO (2003) V-P EXPLORATION (2003) SECRETARY TREASURER (2005) DIRECTOR (2009) INDEPENDENT DIRECTOR (2009) André Gauthier More than 25 years experience in the mining industry Aline Leclerc 1976-2010 Geologist-consultant Laval St-Gelais 1980-2010 Chartered accountant Marcel Bergeron 1981-1983 CMA 1981-1983 Chartered accountant 2007-2010 Director - Strateco Resources Inc (TSX-RSC) Normand Tamaro 1982-2010 Lawyer LL.D (specialized in intellectual property law) INDEPENDENT DIRECTOR (2010) Sylvie Prud homme 1979-2010 Geologist 2005-2010 Director of Investor Relations - Osisko Mining Corporation (TSX-OSK) Corporate Presentation 3
A future producer of Green Metals due to a small environmental footprint in the Zeus and Tansim properties. Matamec is presently evaluating different options for its gold assets, particularly its Matheson JV property with Goldcorp in the Timmins Gold Camp. Corporate Presentation 4
A Strategic Committee For Rare Earths Advises Matamec s Board Of Directors! Anthony Mariano Alex Knox Les Heymann Raynald Vézina A PhD geologist, worked on the identification of eudialyte and other rare earth-bearing minerals at the Kipawa Alkalic Complex A MSc geologist with more than thirty four years of field experience in exploration A chemical engineer with over thirty five years of experience in the metallurgical and management ends of the mining industry. Has over eighteen years of experience of the production of rare earths A mining engineer with more than thirtyfive years of experience in the mining industry. Has worked as a consultant for Matamec on the mineralogy of the Kipawa Complex since 2007. Has worked on the Kipawa deposit from 1985 to 1990. Since 2007, has advised Matamec on the exploration for rare-earths. He will be supervising the upcoming exploration program. Since 2008, he has worked as a consultant to Matamec. Is currently directing Matamec s metallurgical testing program. Since 2008, he has advised Matamec regarding the development of the Kipawa deposit. Corporate Presentation 5
Kipawa TREO Deposit - Location Heavy Rare Earth Enriched Zones: 3,350,000 Indicated tonnes + 6,480,000 Inferred tonnes Quebec, Canada Kipawa Deposit Area Corporate Presentation 6
Kipawa Heavy Rare Earth Deposit - Growth Historical Drill Holes 2009 Drill Program Resource Estimate Completed 2010 Drilling Program New Resource Estimate Will be Done Note the Small Environmental Footprint Corporate Presentation 7
Kipawa Deposit Schematic Cross-Section, all Mineralized Zones SW 70% 20% NE 10% TREO Enriched Zones: Cut-off of Y 2 O 3 0.10% 3,350,000 Indicated tonnes + 6,480,000 Inferred tonnes Corporate Presentation 8
Zeus Property - Overview TH, best channeled interval : 1.9m @ 1.2% TREO (26% of HeavyREO+Y 2 O 3 /TREO) 1.2% ZrO 2 Kipawa deposit (0.1% TREO cut-off) 3.35 Mt indicated @ 0.58% TREO, 33% HREO 6.48 Mt inferred @ 0.60% TREO, 34% HREO Surprise, best channeled interval : 2m @ 5.3% TREO (66% of HeavyREO+Y 2 O 3 /TREO), 3.6% ZrO 2 and 3.9% Nb 2 O 5. Coin: 1.5% TREO, 7.33% ZrO 2 Medium Falaises: 2.35% TREO, 0.32% ZrO 2 Falaises A1: 0.86% TREO, 0.12% ZrO 2 Couleuvre, 4 new boulders averaging 15.8% TREO, 0.04% ZrO 2 Corporate Presentation 99
Ore Crushing Grinding Rare Earth Ore Processing Heat Physical Concentration Cracking Leaching Acid Water Completed Upcoming Solid / Liquid Separation Purification Liquor Solid Tailings Stabilisation Precipitation or Solvent Extraction Raffinate or Barren Liquor Products Products Corporate Presentation 10
Kipawa Deposit: High value - Low cost Minerals: Medium grained and well-crystallized, mostly eudialyte and mosandrite Rare Earth Distribution: Enriched in heavy rare earths Operating cost: Open pit mining, close to infrastructures, relatively low reagent costs Metallurgy: Easily soluble minerals, conventional metallurgical processes Tonnage: Resources sufficient for 10 years. Deposit open at depth. Corporate Presentation 11
Zone KIPAWA DEPOSIT GROSS VALUE UNRECOVERED IN THE GROUND TREO ENRICHED ZONES Tonnage 3,350,000** 6,480,000** Classification Indicated t** Value in Situ Value in Situ Inferred t** (USD) (USD) Lanthanum (39$/kg*) 2,700 105,300,000 5,400 210,600,000 Cerium (36$/kg*) 5,700 205,200,000 11,000 396,000,000 Praseodymium (70$/kg*) 700 49,000,000 1,400 98,000,000 Neodymium (74$/kg*) 2,700 199,800,000 5,200 384,800,000 Samarium (34$/kg*) 600 20,040,000 1,200 40,800,000 Europium (620$/kg*) 100 62,000,000 100 62,000,000 Gadolinium (40$/kg*) 600 24,000,000 1,200 48,000,000 Terbium (595$/kg*) 100 59,500,000 200 119,000,000 Dysprosium (285$/kg*) 700 199,500,000 1,500 427,500,000 Holmium (250 /kg*) 200 7,600,000 300 11,400,000 Erbium (330 /kg*) 500 25,000,000 1,000 50,000,000 Thulium (N/A) 100-100 - Ytterbium (N/A) 400-900 - Lutetium (1600 /kg*) 100 24,100,000 100 24,100,000 Yttrium (38$/kg*) 4,400 167,200,000 9,100 345,800,000 Zirconium (4$/kg*) 29,800 119,200,000 64,200 256,800,000 1,267,800,000 2,474,800,000 *Prices from Metal-Pages, Industrial Minerals and Asian Metals, October 20th, 2010. REE oxides 99% min FOB China, Y oxides 99.999% min FOB China and Zr structrural ceramic/electronic grade. 1 CNY = 0.150296 USD. **Source: SGS Geostat (June 3rd, 2010). LREO: Light rare earths in oxides = La 2 O 3 to Nd 2 O 3. MREO: Medium rare earths in oxides = Sm 2 O 3 to Gd 2 O 3. HREO: Heavy rare earths in oxides = Tb 2 O 3 to Lu 2 O 3. Corporate Presentation 12 Corporate Presentation 12
Estimated World Demand of Rare Earths In tonnes of Total Rare Earth Oxide (TREO) 140000 Total World Demand 2014f: 205 000 Tonnes 120000 100000 80000 60000 40000 China Outside of China 20000 0 2008 2009f 2010f 2014f Sources: Industrial Minerals Company of Australia Pty Ltd (IMCOA) Corporate Presentation 13
Estimated World Production of Rare Earths In tonnes of Total Rare Earth Oxide (TREO) 180000 160000 140000 120000 100000 80000 60000 40000 20000 0 2008 2009f 2010f 2014f China Total World Production 2014f: 203 500 Tonnes Outside of China Sources: Industrial Minerals Company of Australia Pty Ltd (IMCOA) Corporate Presentation 14
Forecast Demand/Production for Individual REEs in 2014 (±15%)* Rare Earth Oxide Demand Supply/Production REO Tonnes Percentage REO Tonnes Percentage Lanthanum 53,800 29.9% 54,800 26.9% Cerium 64,650 35.9% 81,500 40.1% Praseodymium 7,400 4.1% 10,000 4.9% Neodymium 33,950 18.9% 33,100 16.3% Samarium 1,140 0.6% 4,000 2.0% Europium 840 0.5% 850 0.4% Gadolinium 2,450 1.4% 3,150 1.5% Terbium 440 0.2% 400 0.2% Dysprosium 2,090 1.2% 1,800 0.9% Erbium 940 0.5% 1,000 0.5% Yttrium 12,100 6.7% 11,600 5.7% Ho-Tm-Yb-Lu 200 0.1% 1,300 0.63% TOTALS 180,000 100% 203,500 100% Forecast supply shortage in 2014 *Dudley J. Kingsnorth (2009) Corporate Presentation 15
REE Market: US$1.25B Value 124,000t Total Demand Our Niche Sm Ce Y Ho La Gd Er Pr Nd Lu Dy Tb Eu Tm Yb 34$ 36$ 38$ 38$ 39$ 40$ 50$ 70$ 74$ 241$ 285$ 595$ 620$ N/A N/A Application Demand Drivers Gross Value US$M Market Share by Value Catalysts 60 5% Glass (Er) 25 2% Polishing 60 4% Metal Alloys 175 14% Magnets (Tb, Dy) Phosphors (Y, Tb, Dy) Drives for computers, mobile phones, mp3 players, cameras. Hybrid vehicle electric motors. Wind turbines. 475 37% LCDs, PDPs, LEDs. Energy efficient fuorescent lights 400 31% Ceramics 50 4% Other 40 3% Total US$1335M 100% Source: Dudley J. Kingsnorth, IMCOA, October 2009 Source: Metal Pages, Industrial Magazine and Asian Metals, October 2010
World Context for Rare Earths: Light, Medium and Heavy La Ce Pr Nd Sm Eu Gd Tb Dy Ho Er Tm Yb Lu Y Light and Medium REEs Much more common than HREE (85% / 15%) Unit price (36-74$US/kg, except Eu 620 $US/kg) 95% of the market dominated China Mt Weld : TREO 9.7%(Australia) and Mountain Pass: TREO 9.2%(USA) are the only currently known potential competitors to Bayan Obo: 1, 460 million tonnes @3.9% REO, Reserve of 56 million Tonnes light and medium Heavy REEs Unit price per kg (38-595$US per kg) Limited global supply; shortage predicted for 2014 (IMCOA & Roskill, 2010) Sources from China are becoming less secure. The Chinese are limiting exports, consolidating and regulating the producers and are implementing environmental measures which limit production Growing demand both organic growth and new applications Les Heymann (P.Eng.) claims the Kipawa deposit is a potential source of HREO/Yttrium which could compete with the South China Clays (Oct, 2010): 0.03% TREO Corporate Presentation 17
US Vulnerability to Strategic Metals Availability: A North American Solution RESTART ACT: although some argue that this act is meant to foster support for American mines and production centers, it has been demonstrated by, but not limited to, the examples below that the U.S usually does not have qualms about developing projects in Canada. For example: 1. Niobium IAMGold Niobec Mine (Qc), no other mine in North America and very few in the world; 2. Titanium Rio Tinto Lac Tio Mine (Qc), very few other mines in North America; 3. The Zeus Property with the heavy rare earths Kipawa deposit would be the 3rd such property located in Quebec, Canada. Corporate Presentation 18
On Our Way to Meet «December 2014» Demand 2010-2011 Project Schedule Kipawa Deposit Kipawa Deposit Other Zones and Showings Exploration/Geology Trenching/Channel- Sampling (In progress) Surface Drilling (Complete) Geological Modeling (Fall) Infill Surface Drilling (Fall) Evaluation Preliminary Economic Assessment Study (Fall-Winter ) NI43-101 Resources Calc (Complete) Update of NI 43-101 (Fall) Metallurgical Tests (In progress) Exploration/Geology Prospecting (In progress) Trenching / Channel Samp. (Fall) Geological Modeling (Fall) Corporate Presentation 19
Is Matamec on your REE stock portfolio? REE Company Heavy REE Projects Development stage Avalon (T: AVL) Thor Lake Pre-Feasibility (July 2010) Quest (V: QRM) B Zone Preliminary Economic Assessment Study ( PEA ) (Sept 2010) Capital Outstanding Share Value ($) (Oct. 20) Market Capital 88.620 M 4.70 396 M$ 44.798M 5.48 245M$ Matamec (V: MAT Kipawa PEA in progress 98.321M 0.33 32M$ Tasman (V: TSM) Norra Karr Resource Calculation in progress UCORE (V: UCU) Bokan- Dotson Ridge Conceptual Estimate 41.852M 2.13 89M$ 87.228M 0.55 47M$ Corporate Presentation 20
Is Matamec in your REE stock portfolio? Currently Undervalued Great ROI Potential Near Infrastructure Low Cost Metallurgy Small Environmental Footprint Forecast World Shortage of Heavy Rare Earths Current Dependence on China for Supply Strategic Play on Rare Earths Stable Political Climate and Outside of China Corporate Presentation 21
THE END, THANK YOU FOR YOUR ATTENTION!